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HP takes $8.8 billion account charge on Autonomy purchase, says they had "accounting improprieties"

HP takes a massive $8.8 billion write-down after Autonomy lied about their finances

By Trace Hagan from Nov 20, 2012 @ 13:11 CST

HP is a little bit worse for wear today after the news broke that they are taking an $8.8 billion charge on their September 2011 purchase of Autonomy. It seems that the company was practicing some bad accounting practices. While HP CEO Meg Whitman wouldn't exactly call them liars or say they had committed fraud, she did say "serious accounting improprieties" at Autonomy were the cause of the write-down.

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Whitman has also promised legal action that will attempt to recover as much as they can for shareholders, though that likely won't be easy, or much. HP's shares have tumbled on the news of this write-down. It, combined with less than expected revenue results, caused shares of HP stock to tumble more than 10 percent.

The deal was crafted by the previous CEO, Leo Apotheker, and Autonomy's business was independently checked by two different auditors, Deloitte and KPMG, but nobody saw the financial inconsistencies. They've only now come to light because a senior executive at Autonomy blew a whistle and brought it to everyone's attention.

NEWS SOURCES:Techspot.com


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